South African payments company Yoco has secured $16 million (R230 million) from various investors led by Partech, a venture capital firm based in Silicon Valley, Europe and Africa.

The point of sale payments provider said other investors included Orange Digital Ventures, FMO (The Dutch Development Bank), South African-based FutureGrowth and existing Series A investors Quona Capital and Velocity Capital.

The FinTech firm plans to use the cash injection to grow its network of small business merchants, invest in product development, operational scalability and attracting top-tier fintech talent.

The new funding round brings the company’s total investment to R322 million.

Cyril Collon, general partner at Partech and co-lead of the Partech Africa Fund will join Yoco’s board.

Yoco said it was adding over 1 500 new SMEs to its base every month to help small businesses accept card payments and manage their day to day activities.

The company has grown its base to over 27 000 South African small businesses, 75% of which had never accepted cards previously.

Yoco has focused its efforts on expanding access to card payments to all types of SMEs, regardless of size, industry and even location. Its mobile card readers can be used to accept payments both at the store or on the go, and the application process takes five minutes online, after which a courier delivers the card reader to the business owner.

The company now processes over R3.5 billion in card transactions on an annualised basis.

Yoco – founded by by Katlego Maphai (CEO), Carl Wazen (Chief Business Officer), Bradley Wattrus (CFO) and Lungisa Matshoba (CTO) – was the last entrant into the competitive mobile point of sale space in South Africa.

Yoco launched at the end of 2015, after a successful beta programme, with 500 merchants.

At the end of 2016, the company announced it had acquired over 5 000 SME merchants, growing 10x in a year.

Cyril Collon, partner at Partech

“Small businesses, fundamental to sustainable economic growth, are generally underserved in our part of the world due to their size. Running a business is hard enough, we believe accepting money shouldn’t be,” says Maphai, Yoco co-founder and CEO.

“We built Yoco on the key pillars of access and trust. Transforming the long and prohibitive process of applying for a card machine into a simple consumer-like product purchase that can happen online or at the store in minutes. Our Series B investment allows us to continue to scale our operations and deliver a world-class product experience that enables small businesses to thrive.”

Yoco’s strategy is to partner with small businesses early in their life cycle and actively help them grow. It has been adding services to its payments platform, which now includes point of sale software, business intelligence, accounting integrations, and working capital financing, in its bid to create an operating system for the small business.

“Yoco has built a product set and quality operations placing it as a top fintech company not only in South Africa but also globally. We are excited to have Yoco as the second investment from our Africa fund,” says Cyril Collon, partner at Partech says.

Consumer spending in Africa amounts to over $1.4 trillion, much of which is driven by small businesses.

“Yoco’s ability to use technology to solve real problems for African small businesses at scale makes it a unique implementation of our investment strategy.

Yoco has long-term ambitions to be a pan-African player. The company believes the convergence of digital payments and software driven value-added services is inevitable in Africa. It has explored various sub-Saharan markets in the past year, including running pilots in two markets.

“The size of the round and quality of investors shows there is investor confidence and appetite for new business models and untapped segments in South Africa.” says Wazen, co-founder and Chief Business Officer.

“Our new investors are global with strong African footprints and will be great partners in our journey.”

A lover of technology, entrepreneurship and urban places by nature. An award-winning financial writer. He has pieced together an intrepid living writing online, working as a technology blogger and writer, even publishing stories on the Internet of Things (IoT)). A former Southern Africa Correspondent for Thomson Reuters news agency.